Correlation Between Loomis Sayles and Lord Abbett

Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and Lord Abbett at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Loomis Sayles and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Loomis Sayles Bond and Lord Abbett Core, you can compare the effects of market volatilities on Loomis Sayles and Lord Abbett and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Loomis Sayles with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Lord Abbett.

Diversification Opportunities for Loomis Sayles and Lord Abbett

0.98

Correlation Coefficient

Loomis Sayles  Lord Abbett

Almost no diversification

The 3 months correlation between Loomis and Lord is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Bond and Lord Abbett Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Core and Loomis Sayles is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Loomis Sayles Bond are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Core has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Lord Abbett go up and down completely randomly.

Pair Corralation between Loomis Sayles and Lord Abbett

Assuming the 90 days horizon Loomis Sayles is expected to generate 1.17 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Loomis Sayles Bond is 1.41 times less risky than Lord Abbett. It trades about 0.16 of its potential returns per unit of risk. Lord Abbett Core is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,257  in Lord Abbett Core on December 20, 2024 and sell it today you would earn a total of  29.00  from holding Lord Abbett Core or generate 2.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Loomis Sayles Bond  vs.  Lord Abbett Core

Loomis Sayles Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Loomis Sayles Bond are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Loomis Sayles is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lord Abbett Core

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Core are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Lord Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Loomis Sayles and Lord Abbett

The main advantage of trading using opposite Loomis Sayles and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, Lord Abbett can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lord Abbett will offset losses from the drop in Lord Abbett's long position.

The idea behind Loomis Sayles Bond and Lord Abbett Core pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.